Although growth and differentiation appear mutually exclusive during development, in the adult animal the liver can be induced to proliferate actively with negligible loss of differentiated functions. The mechanism through which this occurs are relevant not only to damaged liver, but also to repair organs with limited growth potential and to neoplastic processes as well. Our study is focused on the C/EBP gene which encodes a transcription factor expressed in high abundance in the liver. Recent observations have led to the speculation that C/EBP can play an important role in maintaining the highly differentiated state of specialized cells, by regulating the expression of tissue specific genes and inhibiting growth. Consistent with this model, our studies demonstrate a rapid and extensive down-regulation of C/EBP gene expression during hepatocyte proliferation in the regenerating liver and in culture. On the basis of these observations, we propose that C/EBP is expressed in quiescent hepatocytes to suppress the expression of key growth-related genes. In response to mitogenic stimuli, C/EBP gene expression is then inhibited by repressors which are activated during the G0/G1 transition. The subsequent decrease in C/EBP protein levels relieves the suppression from growth genes, and, thereby, facilitates DNA synthesis. Our proposed studies are designed to address important aspects of this hypothesis. Specifically, we will examine how C/EBP inhibits the proliferation of rat hepatoma cells using C/EBP cDNA expression vectors. This will include an assessment of the phase of the cell cycle effected, and which growth genes are down-regulated by C/EBP. To understand the molecular mechanisms controlling the transcription of the C/EBP gene, we will localize and characterize regulatory elements within the gene that are responsible for the growth related regulation of C/EBP gene expression during hepatic growth in culture. These studies will lead to an analysis of the transacting factors which bind to these elements, and a determination of changes in the expression or activity of these factors during hepatocyte growth in the regenerating liver and in culture. Finally, we aim to identify, by means of an efficient in vivo DNA transfection delivery system, the regulatory elements within the C/EBP gene that respond to partial hepatectomy in the animal, and to the effectors that control hepatocyte proliferation in culture. Valuable information should emerge regarding the mechanisms by which growth of highly specialized cells is regulated.